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Federal Compliance Guide

COBRA Administration Complete Guide

Everything you need to know about COBRA compliance. Qualifying events, notification requirements, premium calculations, and timeline management for benefits brokers and employers.

What is COBRA?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) requires employers with 20+ employees to offer temporary continuation of group health coverage when coverage would otherwise end due to qualifying events.

COBRA applies to group health plans maintained by private-sector employers with 20+ employees and state/local government employers. Federal employees are covered under a similar provision.

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State Mini-COBRA Laws

Many states have "mini-COBRA" laws for employers with fewer than 20 employees. Check your state requirements—California, New York, and Texas have specific provisions.

COBRA Qualifying Events

Qualifying EventDurationEligible Beneficiaries
Voluntary or involuntary job loss (except gross misconduct)18 monthsEmployee, spouse, dependents
Reduction in work hours18 monthsEmployee, spouse, dependents
Employee becomes entitled to Medicare36 monthsSpouse, dependents
Divorce or legal separation36 monthsSpouse, dependents
Death of covered employee36 monthsSpouse, dependents
Dependent child loses eligibility36 monthsDependent child
Disability (SSA determination)29 monthsAll qualified beneficiaries

COBRA Notification Timeline

Day 0
Qualifying event occurs
Responsible: N/A
Within 30 days
Employer notifies plan administrator of qualifying event
Responsible: Employer
Within 14 days
Plan administrator sends COBRA election notice
Responsible: Plan Admin
Within 60 days
Qualified beneficiary elects or waives COBRA
Responsible: Employee
Within 45 days
Initial premium payment due (retroactive to coverage loss)
Responsible: Employee
Monthly
Ongoing premium payments (30-day grace period)
Responsible: Employee

COBRA Premium Calculation

Standard Rate

102%
of total premium cost
(Employer portion + Employee portion + 2% admin fee)

Disability Extension Rate

150%
of total premium cost
(For months 19-29 of disability extension)

Example Calculation

Monthly premium (employer pays $450, employee pays $150): $600
COBRA premium (102%): $612/month
Employee previously paid $150, now pays $612 (4x increase)

Non-Compliance Penalties

$110/day
IRS Excise Tax
Per violation, per affected individual
$100/day
DOL Civil Penalty
Department of Labor enforcement
Unlimited
Private Lawsuits
Coverage + attorney fees + damages

Streamline Benefits Administration

BART helps benefits brokers manage the complexity of employee benefits—from enrollment to COBRA to renewals.